Mobile payments company buys bar tab start-up

Listed mobile payments and marketing company Mobile Embrace has made a A$4.69 million investment in Clipp, acquiring a 31 per cent stake of the bar tab payments company from its existing shareholders. MBE intends to progressively acquire a greater share of Clipp, while increasing its backing.

In a statement to the ASX yesterday, MBE said it had funded the first part of the deal through the issue of 4.59 million new MBE shares at $0.26 per share and 2.29 million MBE options.

A $3.5 million convertible note has also been offered to Clipp by MBE with funds to be drawn down quarterly over 18 months.

If fully drawn as expected, MBE would end up with a total of 72 per cent of Clipp by the end of 2016, with the remainder being held by founders of the business.

Clipp was launched in 2013 and is accepted by 570 hotels and bars throughout Australia, with over 20,000 users transacting over $5 million annually, according to an announcement to the ASX yesterday.

Users enter their credit card details and a photo for verification via the Clipp application, which generates a bar tab number for the customer at the venue.

Clipp co-founder Greg Taylor said the funding from MBE would help accelerate the already rapid growth of Clipp.